Three Tiers of Service Equal Winning Business Strategy

Peoria, Illinois-based Dental Arts Laboratories (DAL) offers its customers three tiers of service: branded DAL restorations from its traditional DAL laboratories; "esthetic zone" high-end restorations from its DAL Signature Restorations Laboratory; and a value line from 360 Dental Laboratory. Here, DAL Executive Vice President Scott Clark, talks about what it's like creating three service levels within one laboratory organization and how offering various tiers helps them thrive in any economic climate.

LMT: Tell us about how DAL's three levels of service evolved.

Clark: DAL was founded in Peoria in 1934 with the business philosophy of providing consistent quality prostheses at reasonable prices to dentists in and around the area. This continues to be our primary business model and, in 2008, represented about 85% of our overall sales. We offer a complete line of products in the average fee range, and our products and price structure match up with the 80% rule of thumb, targeting and appealing to 80% of the dental market.
Our additional DAL locations were created in the late 80s after we went through a rather rough economic spell. To some extent, we were at the mercy of the local business climate: if it got the flu, so did we. We elected to expand our market share in communities around us with additional DAL laboratory divisions in St. Louis, Missouri, and Springfield, Galesburg and Lincolnshire, Illinois.

In 2001, we launched our DAL Signature Restorations division, a separate laboratory located in Peoria dedicated to high performance, high esthetic zone restorations, including fixed, removables and implants. We have had the wonderful opportunity to become an accredited laboratory for many of the leading education centers throughout the U.S.--including the Spear Institute, Dawson Academy, Nash Institute, Charlotte Center for Cosmetic Dentistry and Snow Mountain Seminars--and our Signature division was built around creating, training and accrediting a highly skilled technical staff who can support the specifications and philosophies of each education center.

We also offer a value line that started in the 80s with a division called Vitacast Dental Laboratory, located in Aurora, Illinois. This full-service laboratory functioned as our value offering until 2005 when we realized we couldn't compete with the new offshore competition. At that same time, Dr. Sreshti Vadakattu, a DAL employee, decided to move back to India and we saw an opportunity to open an offshore division under his supervision: 360 Dental Laboratory located in Hyderabad, India. This was the ideal situation for us because we knew that if we were going to provide an offshore service, we wanted to have control of all materials used to make the product and wanted our customers to receive restorations that had the DAL stamp of approval.

Today, Vitacast still serves local customers in the Chicago area and also serves as a technical/service depot for 360 Dental Laboratory. 360 has 24 employees and focuses on fixed restorations but we also offer our 360 customers removable products fabricated by Vitacast to round out our menu of value services. We fully disclose where restorations are fabricated to existing and potential 360 Dental Laboratory customers.

LMT: What are the advantages of offering three service tiers?

Clark: If you look at today's economic climate, you can see how this type of strategy can be advantageous. A year ago, our DAL Signature Restorations division was clipping along nicely; at this time, however, it is down roughly 22% in demand. Fortunately, our DAL brand business is running 1.2% above last year and our 360 Dental Laboratory continues to grow at a rate of 44% per year. This ebb and flow of business allows us to balance out the fluctuations we see in the marketplace.

LMT: When you offer multiple levels of service, how do you handle technician training?

Clark: We provide a steady flow of technical/management training for all of our technicians throughout the year. Since we have separate facilities for each service level, most technicians are trained on the one level of service provided from that location. Our 360 technicians in India are trained once per quarter, while Signature technicians are put through more extensive, focused educational training in order to support the level of training our Signature customers have received from the various educational centers.

For the most part, we offer the same products at all three service levels but the difference in the training lies in the amount of time and labor we invest in producing the final product. Many times dentists ask if we only have our best technicians in our Signature facility, and that's not the case at all. However, since we do put much more time into fabricating a Signature crown, this results in a higher price structure. For instance, a DAL Signature Restorations crown fabricated from Ivoclar Vivadent's Empress is $245, a traditional DAL Empress crown is $175 and a 360 Empress crown is $95.

LMT: How do you market your three levels of service?

Clark: We market each division separately. DAL is marketed both nationally and regionally using a mix of direct sales, national advertising, direct mail and continuing education. DAL Signature Restorations are marketed solely through our contacts with the various education centers, and we promote 360 exclusively through direct mail.

We've been fortunate over the years to have had relationships with many manufacturers who've successfully supported both our technical and marketing efforts, and Ivoclar Vivadent has been one of our most supportive partners in both categories. Any marketing effort is only as successful as the quality and implementation of the product we're promoting, so the first step in a campaign is proper product development. Ivoclar Vivadent recognizes this as a "must" in the product cycle and has also been instrumental in providing us with many levels of skilled training in both removables and fixed prosthodontics.
Its marketing support team is also extremely talented and supplies us with a variety of sales and marketing tools. For instance, for the DAL Esthetic Rendition campaign, Ivoclar Vivadent provided us with a selection of ad themes and looks to choose from, including both the graphic and the basic copy message. It then assisted us in carrying over our chosen "look" into our display booth graphics and support pieces for the line. Ivoclar Vivadent also supplied us with access to its Smile Design Chairside Makeover Kit--customized with a DAL logo--to assist in the standardization and training of dentists in the proper steps for the patient's records appointment.

Ivoclar Vivadent also supported LMT from its 1984 inception. In recognition of this support and in celebration of our 25th anniversary, this is the fifth installment in our Leading through Partnership series featuring profiles of laboratory-manufacturer partnerships. To contact Ivoclar Vivadent: Call 800-533-6825, 800-263-8182 in Canada, e-mail info@ivoclarvivadent.us or visit http://www.ivoclarvivadent.us.

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